eSwatini also experienced rainfall.. http://data.un.org/Explorer.aspx?d=SNAAMA, University of East Anglia Climatic Research Unit, Harris IC, Jones PD (2017) CRU TS4.01: climatic research unit (CRU) time-series (TS) version 4.01 of high-resolution gridded data of month-by-month variation in climate (Jan. 1901Dec. From 1980 to 2018 tropical cyclones were responsible for nearly half of all natural disaster losses worldwide, with damage amounting to an aggregate of USD 2111 billion (Munich Re 2018). Before 2000, only decadal data are available. Freddy has finally been declared over by the French Meteorological service. The main specification is estimated for each of the \(j(={1,,7})\) sector aggregates separately. (2019) show that indirect impacts are nearly as high as direct impacts. It comprises the logged per capita value added of the respective sector j to simulate a dynamic panel model, the population growth rate, a variable for openness (i.e., imports plus exports divided by GDP), and the growth rate of gross capital formation.Footnote 18 Including these socioeconomic control variables introduce some threats to causal inference. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Appendix A.3 provides a more detailed description of the composition of the individual ISIC categories. I show point coefficient estimates as well as accumulated effects and error statistics calculated via a linear combination of the lagged \(\beta _{t-L}\) coefficients.Footnote 17. 2014). In total, I exclude five country-year observations from my analysis: Dominican Republic 1979, Grenada 2004, Montserrat 1989, Myanmar 1977, and Saint Lucia 1980. The situation is completely different in the wholesale, retail trade, restaurants, and hotels sector aggregate, where a negative influence can be observed over almost the entire 20-year period. Tropical Cyclone Eloise, which hit southeastern Africa in January 2021, caused widespread flooding and landslides, resulting in at least 21 deaths and. Cyclone Ingrid - Wikipedia The coefficients are interpreted by a one standard deviation increase in tropical cyclone damage (above zero).Footnote 24 For example, due to a standard deviation increase of tropical cyclone damage, the manufacturing sectors use -0.66% less input from the construction sector aggregate relative to the average InputOutput coefficient (0.0045) to produce one unit of output. However, an area weight has the disadvantage of including largely unpopulated areas, such as deserts, which are economically meaningless. \end{aligned}$$, $$\begin{aligned} Damage_{i,t}= \dfrac{\sum _{g \in i}w_{g,t-1}}{W_{i,t-1}}*\sum _{g \in i} S (max)_{g,t}^{3}\mathbb {1}_{S(max)>92}, \end{aligned}$$, $$\begin{aligned} IO_t^{j,k}=\frac{Input_t^{j,k}}{Total Input_t^j} \end{aligned}$$, $$\begin{aligned} Growth_{i,t-1->t}^j=\alpha ^j + \beta ^j * Damage_{i,t} +\gamma ^j*{\mathbf {Z}}_{i,t-1} + \delta _t^j + \theta _i^j + \mu _i^j*t + \epsilon _{i,t}^j, \end{aligned}$$, $$\begin{aligned} Growth_{i,t-1->t}^j= & {} \alpha ^j + \sum _{L=0}^{20}( \beta _{t-L}^j * Damage_{i,t-L}) +\gamma ^j*{\mathbf {Z}}_{i,t-1} \nonumber \\&+ \delta _t^j + \theta _i^j + \mu _i^j*t + \epsilon _{i,t}^j, \end{aligned}$$, $$\begin{aligned} IO_{i,t}^{j,k}= & {} \alpha ^{j,k} + \beta ^{j,k} * Damage_{i,t}+ \lambda ^{j,k}*IO_{i,t-1}^{j,k} +\gamma ^{j,k}*{\mathbf {Z}}_{i,t-1} \nonumber \\&+\,\delta _t^{j,k} + \theta _i^{j,k} + \mu _i^{j,k}*t + \epsilon _{i,t}^{j,k}, \end{aligned}$$, $$\begin{aligned} R = {\left\{ \begin{array}{ll} 30, &{} \text {if } L \leqq 24^\circ \\ 30 + 2.5*abs(L)-24, &{} \text {if } L> 24^\circ \\ 75, &{} \text {if } L > 42^\circ . Given the different theoretical possibilities, it is not surprising that the empirically identified effects are rather ambiguous. Excellent proofreading was provided by Jamie Parsons and Harrison Bardwell. I also explore the effects on the 26 individual sectors later in this paper. Additionally, it is unexplained how the sectors are interconnected and if their structural dependence changes. Moreover, extreme damaging tropical cyclones are relatively rare. Hurricane Florence's Economic Damage on Carolinas, Virginia, and US Pictured: The East Coast of the U.S. and the Gulf of Mexico viewed by satellite as Hurricane Florence made landfall on September 14. In general, this analysis reveals production scheme transformations that can result from both supply and demand changes of the sectors due to tropical cyclones. In subsequent years, tropical cyclones negatively affect the majority of all sectors. Tropical cyclones are compact, circular storms, generally some 320 km (200 miles) in diameter, whose winds swirl around a central region of low atmospheric pressure. 2012), insurance payments (Nguyen and Noy 2019), or government spending (Ouattara and Strobl 2013), which help the economy reach its pre-disaster income level. For tropical cyclones, no empirical cross-country study on indirect effects exists so far. 4. Further details on the data on tropical cyclones can be found in Appendix A.1. An exception forms the mean damage robustness test for the wholesale, retail trade, restaurants, and hotels sectors, where the coefficient turns slightly insignificant (\(p=0.12\)). As my panel has a length of 2545years, depending on the chosen model, I assume this bias will not influence my analysis.Footnote 19 Second, all control variables are measured in \(t-1\) to reduce potential endogeneity problems stemming from the fact that control variables in t can also be influenced by tropical cyclone intensities in t (Dell etal. The number in parentheses compares the coefficients to the sample average of the respective InputOutput coefficient (in %). Therefore, in this section, I investigate, by means of the InputOutput analysis, how the sectors change their interaction after a tropical cyclone has hit a country. The radius of maximum wind (R, in km) is related to the latitude (L) of the respective raw data tropical cyclone position in the following way: Since the tropical cyclone data are available at global coverage since 1950, I will extend my database later for further specifications. Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013). The sum of these exposure weights \(w_{g,t-1}\) is divided by the total sum of the weights \(W_{i,t-1}\) in country i in period \(t-1\). 6: The manufacturing sectors ask significantly less input from it. Better post-disaster assistance is not the only required improvement; policymakers should also find ways to better prepare the affected sectors of their economy for possible effects of tropical cyclones before they strike. 2014). Q J Econ 131(3):15431592, Berlemann M, Wenzel D (2018) Hurricanes, economic growth and transmission channels: empirical evidence for countries on differing levels of development. The country fixed effects \(\theta _i\) control for unobservable time-invariant country-specific effects, such as culture, institutional background, and geographic location. The different economic activities are classified as follows with the respective ISIC codes given in parentheses: agriculture, hunting, forestry, and fishing (A&B); mining, and utilities (C&E); manufacturing (D); construction (F); wholesale, retail trade, restaurants, and hotels (GH); transport, storage, and communication (I); other activities (JP), which include, inter alia, the financial and government sector. The underlying tables are only included for the direct sectoral effects, while the robustness tables for the InputOutput analysis are available upon request. Resembling large whirlpools, they are made up of rotating, moist air, with wind speeds that can reach over 120 km/h. Nat Hazards Rev 18(3):04016012, Mohan P, Strobl E (2017) The short-term economic impact of Tropical Cyclone Pam: an analysis using VIIRS nightlight satellite imagery. First, I run two randomization tests: a Placebo test by using leads instead of the contemporaneous measure of the damage variable and a Fisher randomization test, where I randomly permute the years.Footnote 29 Second, to rule out potential omitted variable biases, I include additional climatological variables (precipitation and temperature) and a set of socioeconomic variables (population growth rate, economic openness, the growth rate of the gross capital formation, and logged per capita value added of the respective sector).Footnote 30 Third, I test different trend specifications: region-specific, nonlinear, and no trends at all. 2018) or exposed area (Hsiang and Jina 2014) to weight the respective physical intensities of tropical cyclones. In contrast to this, the no recovery hypothesis states that natural disasters can lead to a permanent decrease of the income level without the prospect of reaching the pre-disaster growth path again.Footnote 1 This could result from a situation where recovery measures are not effectively implemented or where various negative income effects accumulate over time (Hsiang and Jina 2014; Onuma etal. All weights are available in the HYDE 3.2 data set (Klein Goldewijk etal. J Econ Geogr 19(2):373408, Cuaresma JC, Hlouskova J, Obersteiner M (2008) Natural disasters as creative destruction? What are 3 impacts of tropical cyclones? The analysis of the past influences of tropical cyclone damage demonstrates that the sectoral growth response following a tropical cyclone is a complex undertaking. Bull Am Meteorol Soc 91(3):363376, Knutson T, Camargo SJ, Chan JC, Emanuel K, Ho C-H, Kossin J, Mohapatra M, Satoh M, Sugi M, Walsh K et al (2020) Tropical cyclones and climate change assessment: part II: projected response to anthropogenic warming. Appendix A.5 presents further statistics: Figs. How did tropical cyclone Florence impact the economy? Cyclone Nivar : A cyclone is a general term for a weather system in which winds rotate inwardly to an area of low atmospheric pressure. 2008; Mendelsohn etal. 2017). Freddy: The deadly cyclone that lasted more than a month Nearly 2 million people have died globally due to tropical cyclones. This cost could climb higher as many rivers have yet to crest and may yet cause additional flooding. Older empirical studies suffer to a large extent from endogeneity problems in their econometric analysis because their damage data are based on reports and insurance data, such as the Emergency Events Database (EM-DAT). These surges, sometimes called tidal waves, can drown people and animals, and are often the greatest killers in a cyclone. Concurrently, the construction sector demands significantly more input (1.84%) from the agriculture, hunting, forestry, and fishing sector. Perhaps the most challenging task is to identify critical sectors that may be responsible for widespread spillover effects leading to substantial modifications in other sectors production input schemes. Climate change impacted Hurricane Florence's precipitation and size Notes The y-axis displays the cumulative coefficient of tropical cyclone damage on the respective per capita growth rates, and the x-axis shows the years since the tropical cyclone passed. To implement the Fisher randomization test, I use the code generated by He (2017) and randomly permute the years of the tropical cyclone damage variable for 2000 repetitions. The build-back-better hypothesis describes a situation where natural disasters first trigger a downturn of the economy, which is then followed by a positive stimulus, leading to a higher growth path than in the pre-disaster period. These factors are a decrease in the forward speed of a storm, increased intensity, and more water vapor in the atmosphere. To be in line with the related growth literature, I estimate a further specification where I add a set of socioeconomic control variables (Islam 1995; Strobl 2012; Felbermayr and Grschl 2014). 2019), Felbermayr and Grschl (2014) show that storms from the previous fiveyears can also have a negative growth effect. For the sample average (0.88) of the regression of Column (1), this effect can be translated into a decrease of \(-298\)%, as displayed in Fig. Additionally, within the agriculture, hunting, forestry, and fishing sectors, only the fishing sector experiences indirect negative effects. How did the tropical cyclone impact the communities of Florence? | how On the other hand, EORA26 works continuously on quality check reports and compares its result to other InputOutput databases such as GTAP or WIOD.Footnote 13. 3, their intensity and frequency are spread considerably between years and countries. J Urban Econ 88:5066, Elliott RJ, Liu Y, Strobl E, Tong M (2019) Estimating the direct and indirect impact of typhoons on plant performance: evidence from Chinese manufacturers. In order to design effective mitigation and adaptation disaster policies to this threat, it is important to understand the economic impact of natural disasters. Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. Immediately after the disaster, the policy should concentrate on the agriculture, hunting, forestry, and fishing, and the wholesale, retail trade, restaurants, and hotels sector aggregates, as they are most vulnerable, and/or recovery measures have not been conducted efficiently in these sectors. 2632). (2012) use data from EM-DAT as main input for their explanatory variables. Since the tropical cyclone data has global coverage since 1950, I am able to introduce lags of up to 20years without losing observations of my dependent variable, which ranges from 1971 to 2015. Tropical cyclone | Definition, Causes, Formation, and Effects My results indicate that this negative aggregate effect can be attributed to two sectoral aggregates, including agriculture, hunting, forestry, and fishing; manufacturing and wholesale, retail trade, restaurants, and hotels. As per the guidelines of the World . J Econ Lit 52(3):740798, Dupor B (1999) Aggregation and irrelevance in multi-sector models. Gross value added is defined by the UNSD as the value of output less the value of intermediate consumption (United Nations Statistical Division 2015a). The agricultural sector relies heavily on environmental conditions as most of its production facilities lie outside of buildings and are hence more vulnerable to the destructiveness of tropical cyclones. Tropical storm case study - Hurricane Ida - Tropical cyclones - Edexcel Depending on the level of aggregation, I run 49 (7*7) or 676 (26*26) different regressions. The second most indirectly affected sector is the construction sector. Storms that are strongest originate off the west coast of Africa because they have two weeks worth of warm water to build up over. Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013 ). 6, these positive demand shocks lead to a positive growth impulse in the construction sector. (2012) investigate the effect of natural disasters on three sectors (agriculture, manufacturing, service) in a global sample for the period 19612005. First, I only use the damage fraction due to maximum wind speed of tropical cyclones. How did the tropical cyclone impact environment Florence? | how did Part of Springer Nature. With this paper, I close this research gap by using an InputOutput panel data set to analyze potential sectoral interactions after the occurrence of a tropical cyclone. However, little is known about the empirical InputOutput effects across broader sectors after a natural disaster shock. However, the presented results are generalized for 205 countries at most, and every specific country should make an analysis of their specific vulnerability and individual exposure. Positive effects include, for instance, as a consequence of the destruction of capital, that the marginal productivity of capital increases, making it more attractive to invest in capital in the affected area (Klomp and Valckx 2014). 2020). PLoS ONE 14(4):121, Strobl E (2011) The economic growth impact of hurricanes: Evidence from U.S. coastal counties. They show that there are nearly no lagged responses present. Previous empirical studies on the relationship between economic development and tropical cyclone damage found a negative influence on GDP growth (e.g., Strobl 2011; Bertinelli and Strobl 2013; Grger and Zylberberg 2016). The coefficients show the increase of the respective damage variable by one standard deviation. The data are collected every year for as many countries and regions as possible.Footnote 11 The sample used in my analysis covers the 19702015 period and includes a maximum of 205 countries.Footnote 12, To analyze potential sectoral shifts within the economy after a tropical cyclone, I take advantage of the InputOutput data of EORA26 (Lenzen etal. J Eur Econ Assoc 18(6):33373375, Forster J, Schuhmann PW, Lake IR, Gill JA (2012) The influence of hurricane risk on tourist destination choice in the Caribbean. To underpin the causal identification, I conduct a falsification test, where I introduce leads instead of lags of the Damage variable, as well as a Fisher randomization test. Mohan (2017) provides further evidence that in Caribbean countries agricultural crops are more severely affected by hurricanes compared to livestock. Additionally, it seems that the fishing sector is responsible for the negative supply shock in the agriculture, hunting, forestry, and fishing sector aggregate. Finally, the standard errors \(\epsilon _{i,t}\) could be biased by the autocorrelation of unobservable omitted variables (Hsiang 2016). See the CLIMADA manual for furher details on the methods used https://github.com/davidnbresch/climada/blob/master/docs/climada_manual.pdf. It is evident from this analysis that many potential production changes are canceled out because of counteracting indirect effects. The variables are measured in constant 2005 USD. Climate change will lead to fewer tropical cyclones overall. The results indicate that the policies should focus on the direct costs of tropical cyclones. The weighted tropical cyclone damage variables are orthogonal to economic growth as well as the InputOutput coefficients, and the panel approach allows me to identify the causal effect. To deal with this problem, I will re-estimate my regression models with Newey and West (1987) as well as spatial HAC standard errors (Hsiang 2010; Fetzer 2020), which allow for a temporal correlation of 10years and a spatial correlation of 1000 kilometer radius.Footnote 20. https://ideas.repec.org/c/boc/bocode/s352601.html, Nguyen CN, Noy I (2019) Measuring the impact of insurance on urban earthquake recovery using nightlights. Social, Environmental and Economic impacts - Tropical Cyclones - Weebly From a theoretical perspective, a natural disaster can have both positive and negative effects. Queensland has 20% of Australia's sugar cane production, but . In total, the majority of all sectoral aggregates experience lagged negative growth effects due to tropical cyclones. Driven by climate change, at least in some ocean basins (Elsner etal. Thus, tropical cyclones are and will continue to be a serious threat to the life and assets of a large number of people worldwide. Section 5 concludes with a discussion of the results and highlights policy implications. More recent studies have started to use physical data, such as observed wind speeds, to generate a more objective damage function for the impacts of tropical cyclones (e.g., Hsiang 2010; Strobl 2011; Felbermayr and Grschl 2014; Bakkensen etal. Technical report, Universit catholique de Louvain (UCL). J Monet Econ 43(2):391409, Elliott RJ, Strobl E, Sun P (2015) The local impact of typhoons on economic activity in China: a view from outer space. Color intensities indicate p values according to: \(p<0.01\), \(p<0.05\), \(p<0.1\). For the latitude and longitude the model takes a spline interpolation, whereas for intensity and time observations it uses a linear interpolation. On average, the sector aggregates agriculture, hunting, forestry, and fishing (A&B) and mining and utilities (C&E) are only slightly dependent on other sectors, while there is a stronger dependence for the remaining sectoral aggregates. Natural Hazard-Induced Disasters and Production Efficiency: Moving Closer to or Further from the Frontier? This study aims to better understand the sectoral impacts of tropical cyclones by looking at the direct and indirect effects in a large data set covering 205 countries from 1970 to 2015. After one year, we can also detect a positive effect in the construction sector, which is not surprising given the higher number of orders due to reconstruction efforts. In this respect, the results of this research can also be used to calculate the future costs of climate change. What will Hurricane Florence impact be on the economy? In contrast to Eq. Furthermore, the results of the randomization test show that the \(H_0\) of no effect of tropical cyclone damage can be rejected at the 1% and 5% level of confidence for the agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels sectors, respectively. Even though, I thereby omit potential rainfall and storm surge damage, it is a common simplification in the literature (Hsiang 2010; Strobl 2011; Strobl 2012; Elliott etal. Acemoglu D, Carvalho VM, Ozdaglar A, Tahbaz-Salehi A (2012) The network origins of aggregate fluctuations. (Color figure online). Hurricane Florence - Wikipedia Econometrica 55(3):703708, Newson R (1998) PARMEST: Stata module to create new data set with one observation per parameter of most recent model. This hypothesis is supported by empirical findings for a positive GDP growth effect for Latin American countries (Albala-Bertrand 1993), for high-income countries (Cuaresma etal. Am Econ J Appl Econ 8(2):123153, Guha-Sapir D, CRED (2020) EM-DAT: the emergency events database. Further losses can occur if business continuity is lost through disrupted supply of intermediate inputs from, or distribution to, other businesses. However, as an additional robustness test, I also show a regression where I include these outliers and the results remain unchanged. Quick Answer: How Did Hurricane Florence Impact Public Health 2019). To demonstrate the average intersectoral connections within my sample, Fig. The start of the arrow shows the input, and the end denotes the respective output. While the importance of the fishing sector for indirect tropical cyclones effects is a novel finding, it does not mean that other agricultural sectors do not exhibit negative direct effects.Footnote 28. Based on the InputOutput analysis, there are only a small number of significant sectoral shifts. The individual colors represent different wind speed intensities. By doing so, I test the null-hypothesis of no effect of the damage variable. Nearly 2 million people have died globally due to tropical cyclones. J Dev Econ 88(2):221231, Onuma H, Shin KJ, Managi S (2020) Short-, medium-, and long-term growth impacts of catastrophic and non-catastrophic natural disasters. Surprisingly, the sector aggregate mining and utilities turns negative three years after the tropical cyclone has hit the country.